On a day when the tech-heavy Nasdaq Composite Index fell more than 3 percent, one new issue stood out. Shares of GoodRx soared 53 percent on their first trading day Wednesday (Sept. 23) after the company staged an initial public offering (IPO) at $33 a share.
The gains show how sanguine investors are about disrupting the pharmacy prescription space. GoodRx offers coupons and discount cards to consumers that can help shave the costs of prescription drugs.
But unlike some hot tech companies that have staged IPOs in recent months, GoodRx is actually profitable. The firm made $55 million in 2020’s first half, up from $31 million a year ago. Revenues also rose roughly 48 percent to $257 million over the same period.
Discounts for prescriptions are one thing — couponing site RetailMeNot.com offers Rx discount cards — but if there’s one overarching trend in the prescription drug space, it’s that consumers no longer wants to pay full retail prices. High deductibles also make many consumers mindful of healthcare costs in an age where U.S. individuals and families shoulder roughly a third of healthcare costs.
And of course, no one really wants to visit the corner drugstore, stand in line and pay at the register — at least not in the COVID-19 age. All manner of interactions across daily life are migrating to mobile devices, from doctors’ visits moving to streaming video feeds and pharmacies delivering drugs to the doorstep.
All of that is leading to the disintermediation of the traditional brick-and-mortar pharmacy. That leaves the door open to scores of disruptive competitors like GoodRx to nip at the largest players’ heels.
As NowRx Co-Founder and CEO Cary Breese told PYMNTS CEO Karen Webster “there's an entirely new dimension to delivery pharmacy and healthcare. There's obviously been a brace of telemedicine. It's something we've talked about for years … and now it feels to me like it is actually going mainstream.”
NowRx delivers prescriptions direct to consumers in a matter of hours, disrupting a brick-and-mortar pharmacy model that’s predicated on bringing foot traffic into drug stores so consumers will stock up on other items while waiting for their medicines.
Other DTC players such as Truepill have a telehealth component as well, seeking to give an end-to-end, platform-based push that helps patients see medical professionals, get diagnosed and get prescriptions all in the same day. Truepill Co-Founder and President Sid Viswanathan and CEO Umar Afridi told PYMNTS that the staid pharmaceutical industry is due for a jolt from DTC and technology — specifically application programming interfaces (APIs).
As Viswanathan told Webster in an interview, if one believes 80 percent of medical visits are going to happen over telemedicine channels, “you have to believe it’s going to require a new type of healthcare structure.”
Other companies such as Thirty Madison have focused on consultations and treatments (along with subscriptions) for a few specific conditions, such as hair loss or migraine headaches. To get a sense of how even the most entrenched stakeholders view likely disruption of the current model, consider the fact that Thirty Madison recently got $47 million in a funding round that included Johnson & Johnson.
In other words, the writing may be on the wall for traditional pharmacies — and it’s a lot easier to read than your physician’s scrappy Rx scrawl.